Variable Frequency Drive (VFD) Market Report

The increase of automation in the industrial sector has fuelled market expansion. According to the latest World Robotics research, 553,025 new industrial robots installed in companies globally in 2023, an all-time high. The emphasis on smart manufacturing practises is an important market trend. As per the India Brand Equity Foundation (IBEF), the Government of India has set an ambitious objective of expanding manufacturing output contribution to GDP to 25% by 2025 from 16%. The Udyog Bharat 4.0 Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) programme intends to raise awareness of Industry 4.0 in the Indian manufacturing industry and allow stakeholders to overcome automated material handling concerns.

Furthermore, the manufacturing industry is going towards automation as a result of the globally influence of Industry 4.0, the internet of things, and smart manufacturing practises. VFDs are an excellent fit for this emerging trend. For instance, to provide a variety of drive options, Danfoss collaborated with the Chennai Metro Rail (CMRL) and Kolkata Metro Rail Corporation (KMRC). VFDs are being used in a variety of innovative applications. VFDs are used in applications with grid connections, such as frequency converters and pump storage. VFDs are also expected to be used in new industries such as capturing carbon, hydrogen generation, and transportation.

VFDs offer several energy-saving benefits, but the cost of installing VFD devices may limit market expansion. The use of these drives in any industry or application improves process efficiency; however, during the upgrade and expansion of any project, the power requirement is frequently changed, which may result in the drive being used as per the customer's needs for the distribution system, which raises the total cost of installation. Furthermore, VFDs for applications such as HVAC have lower power factors, harmonics, and operating noise, which may damage the system's distribution capacity, resulting in a rise in overhead costs.

Furthermore, incorporating variable frequency drives (VFDs) into current systems may pose notable difficulties, mainly because of the intricate process of adjusting these drives to diverse industrial configurations. This level of integration frequently demands high-level technical skills and know-how, as VFDs need to be coordinated with current control systems, motors, and infrastructure. Adjustments, reprogramming, and testing are often required in the process to guarantee compatibility and achieve optimal performance. Throughout this time frame, businesses could encounter prolonged periods of inactivity while the system is restructured and tested, which could impact production schedules and operational efficiency. Moreover, industries shifting to VFD technology may encounter significant challenges such as increased expenses, prolonged implementation timelines, as well as the requirement for specific skills and potential workflow disruptions, acting as major obstacles.

Variable frequency drives (VFDs) are essential in enhancing motor performance by modifying speed and torque based on operational requirements. This feature improves energy efficiency, lowers operational expenses, and prolongs the lifespan of equipment. VFDs play a crucial role in industries by providing accurate process control, reducing energy inefficiencies, and decreasing greenhouse gas emissions. Their indispensability in modern automation and energy management is driven by their capability to enhance system reliability and adjust to different load conditions, ultimately promoting operational excellence and sustainability. For instance, in April 2023 ABB stated that it will accelerate its expansion plan in the United States by investing around US$ 170 million and generating highly skilled jobs in manufacturing, innovation, and distribution operations. The opening of the drives and services manufacturing plant will boost industrial electric drive production capacity in the United States and provide more customer services. In the US market, the company provides a comprehensive range of AC variable frequency drives and controllers that minimise energy usage in buildings and industrial applications. In addition, in October 2023, Invertek Drives Ltd, a leading innovator and manufacturer of electric motor control technology, has unveiled a new product poised to redefine elevator motor control. The company introduced its new variable frequency drive (VFD), Optidrive Elevator Core, at Interlift 2023, one of the world's premier elevator industry events.

The variable frequency drives market in China is expected to grow rapidly due to expanded operations, particularly in the oil and gas industries and power generation as well as major investments in manufacturing facilities. China's emphasis on infrastructure growth has resulted in FDI in a variety of manufacturing and industrial industries. The Chinese government's active support has empowered a higher number of value-added industries, resulting in overall industry growth, with several Chinese industrial sectors, such as solar and wind energy, automotive, petrochemical processing, telecommunications, and steel production, placing among the top contributors to the country's economic progress. As a result, these industries have the greatest influence on the demand for variable frequency drives. As a result, China remains the most profitable VFD market.

With rising energy prices, the Indian VFD sector is entering a development phase, requiring the use of energy-efficient motor control systems and drives. End-user awareness of the benefits of excess drives, including as greater process control performance, reduced maintenance requirements, and longer motor and equipment life, encourages VFD adoption. Over the past few years, regulatory bodies in Asia-Pacific countries have been continuously enforcing energy consumption regulations. This should provide strong development potential for the variable frequency drives market over the next 5-7 years.